In an auto accident case, is it possible to owe an attorney after the insurance company offers a settlement?

I was a passenger in an auto accident and hired a lawyer to take my case. We were rear ended at a red light so therefore are not at fault. Went to the chiropractor for neck injuries caused by the whiplash and back injuries that were strains and discomfort. At this stage I was contacted by my case worker of the firm and he told me after the attorney's fee and medical bills I will end up owing 125$. I was told that the insurance company wants to settle for 4k or 4.5k (I don't recall). He mentioned that the 125$ will be taking out of the PIP check (2,500$) leaving me with $2,375. I'm curious to know if this happens often, rarely, or is unheard of.